Gold Price Analysis: XAU/USD bulls seeking continuation in dollar weakness


  • Gold is supported on the daily 10 EMA.
  • The 61.8% Fibo aligns with prior highs of 1,758 that guards 1,739.69.
  • US dollar is in focus, bears looking to fade. 

Gold was trading in a tight range on Friday and it had travelled between a low of $1,764.31 to a high of $1,773.74 to end flat on the day following a late afternoon recovery. 

It is starting out the week in holiday thin markets flat and idles $1,769.

A focus for the week ahead is in the short dollar position which also relatively high, so profit-taking ahead of this week's jobs data on Friday could be the theme.  

The DXY rallied some 0.7% on the day from 90.5910 to a high of 91.3229 on Friday to end down 2.1% for the month of April, its largest monthly loss since December.

Meanwhile, a developing trend of firmer-than-expected economic data, higher commodity prices amid supply disruptions as well as huge fiscal and monetary policy support is raising inflation tail risk.

The jobs data will be critical in this respect but so too will be January Consumer Price Index data Wednesday.

Headline inflation is expected to rise a tick to 1.5% YoY, while core is expected to fall a tick to 1.5% YoY.  

Also, Fed Chair Powell speaks to the Economic Club of New York Wednesday. 

''Looking ahead, no further talk of tapering from the Fed and more talk of big stimulus from Treasury is likely to continue weighing on the dollar and so we can't sound the all-clear just yet. That said, we are becoming increasingly confident that the dollar bottoms in Q1,'' analysts at Brown Brothers Harriman explained. 

Gold technical analysis

Chart of the Week: Gold price analysis, a bearish bias persists

The rising 20-day EMA has been important in the case of the bulls which is offering support.

Gold, however, slipped to below prior supporting daily closes and has now formed a new resistance structure. A break of which will likely see a daily extension.

Meanwhile, a failure below the support will open prospects for a deeper retracement of the daily bullish impulse.

The 61.8% Fibo aligns with prior highs of 1,758 that guards 1,739.69.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Are you new to trading or have been trading for a while and you feel stuck?

Try with us!
Become Premium!
   

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD retains gains after upbeat US data

EUR/USD holds on to daily gains in the 1.2050 region after better-than-anticipated US employment-related data. Initial Jobless Claims decreased to 498K in the week ended April 30.

EUR/USD News

GBP/USD trades around 1.39 after a choppy reaction to the BOE

GBP/USD is trading around 1.39 after an 80-pip move around the BOE's "Super Thursday." The bank announced a slowdown in buying bonds but no change to the overall scope. US jobless claims and elections in Scotland are awaited. 

GBP/USD News

Gold surges above $1,800, highest since February

Gold has extended its gains and has finally broken above the psychological barrier of $1,800. XAU/USD bulls had previously been rejected at this level.

Gold News

Ripple bulls charge ahead, $2 incoming

XRP price shows a solid bullish bias that has led to a 25% spike over the last 24 hours. Ripple retraces 7% as bulls take a breather after facing rejection at $1.76. A 20% upswing will push the remittance token to new yearly highs at $2.

More Cryptocurrencies News

US Nonfarm Payrolls April Preview: When the economy booms, its all about rates

The US labor market’s stars appear aligned for April.The economy is expanding rapidly, employers are confident and consumers eager to throw off the restraints of the past year.

Read more

Forex MAJORS

Cryptocurrencies

Signatures